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Picking out the right coverage can seem daunting, but buying car insurance doesn’t have to be scary. Here’s a step-by-step guide to the process.
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If you have a car, you probably also have car insurance. Most U.S. states require drivers to carry a minimum amount of insurance, and even in the two states where car insurance isn’t required by law, drivers still have to be able to pay for any damage they cause, so having car insurance is still essential.
But buying car insurance can feel overwhelming, whether you’re doing it for the first time or the tenth time. If you’re not sure where to start, here are the steps to buying and choosing car insurance coverage:
Decide how you want to buy car insurance
Determine how much car insurance coverage you need
Fill out an application for car insurance quotes
Get your quotes
Compare your car insurance quotes
Pick a car insurance company and get insured
Cancel your old car insurance policy
Ready to shop car insurance?
Don’t worry, that may seem like a lot of steps, but buying car insurance is actually a pretty straightforward process, and you can probably complete the whole process in an afternoon. Let’s break down what’s involved in all of the steps to getting coverage.
Car insurance can be bought directly from an insurance company or through an independent broker like Policygenius
When choosing coverage types and amounts, you should consider how often you drive and where, how much your vehicle is worth and how much you’d be willing to pay out-of-pocket if it were damaged in an accident
Before you buy insurance, you should compare quotes from multiple carriers, taking into account third-party ratings and coverage options as well as price
There are two ways to buy car insurance, directly from an insurance company or through an independent insurance agency like Policygenius.
If you already have homeowners or renters insurance, it may make sense to purchase your new car insurance policy through the same company. You’ll usually get a discount for bundling multiple types of coverage.
If you already have an auto policy and want to add a new car to your existing coverage, that’s usually simple as well. The only downside to going with your current insurer is that you miss out on shopping around, and you might not get the best possible rates.
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You can shop around by getting quotes from several insurers, but this involves a lot of legwork (not to mention a lot of emails — each company will email you a quote). You can do the comparisons on your own this way, but it can take awhile to go through the quote process with every carrier separately.
Buying car insurance through an independent insurance broker like Policygenius can streamline the process. You can fill out one application and get multiple quotes, and then you’ll have an expert guiding you through the process.
Since brokers work with several insurance companies, they can ensure you get the best coverage and the best deal. If you do already have a homeowners or renters policy — or you’re planning to combine policies — a broker can offer you the same bundled savings as a carrier would.
Figuring out how much of each type of car insurance coverage you need is one of the harder parts of buying auto insurance. First, you’ll want to familiarize yourself with the different components of an auto policy. Those coverages include:
Liability coverage - Covers the costs if you cause an accident, property damage or injury to someone with your vehicle. Liability insurance is required in most states
Personal injury protection - Covers medical and rehabilitation expenses if you or your passengers are injured in a car accident. Also covers other related expenses, like lost wages
Uninsured/underinsured motorist coverage - Covers the costs if you’re in an accident caused by a driver who either doesn’t have insurance or whose insurance can’t pay for the full extent of the damage
Collision coverage - Covers damage to your own vehicle after an accident, regardless of who was at fault
Comprehensive coverage - Covers any damage to your car that can happen when it isn’t being driven, including damage from extreme weather, falling objects, flood, fire, vandalism and theft
Gap insurance - If your car is totaled, this pays out the difference between the car’s actual cash value (ACV), which includes depreciation, and the amount you still owe on a car loan or lease so you aren’t stuck making payments on a car you no longer have
Then there are additional coverage options , like roadside assistance, which covers things like flat tire changes, jump-starts and towing, or new car replacement coverage, which will pay for a replacement if your new car is totaled, usually within one or two years of ownership.
You’ll also want to look up the car insurance requirements in your state. But remember, your state minimums are a starting point for determining coverage — often, they’re too low to sufficiently cover you in the event of a major accident.
Let’s say your state requires at least $15,000 in property damage liability coverage, and you cause an accident that results in $45,000 worth of damage. You’ll have to pay the difference, leaving you on the hook for $30,000 which you’ll then have to pay out of pocket.
When choosing coverage types and amounts, consider factors like how often you drive and where, whether your car might be stolen or broken into and if you live somewhere where extreme weather could damage your vehicle.
Whether you decide to apply through an independent broker like Policygenius or conduct a full quote comparison on your own, you’ll need the following info on hand when applying for car insurance:
Names of all drivers in the household
Dates of birth for all drivers in the household
Driver's license numbers for all drivers in the household
Social Security numbers for all drivers in the household
VINs (Vehicle Information Numbers) or make and model years for all vehicles
An address for the insured (where you live and where the car is garaged, which is usually the same place)
Your declarations page from your most recent prior car insurance policy
As you go through the process, you’ll have to answer questions that can help earn you discounts on your coverage, like whether you have any accidents or violations on your record, whether you’re a full time student and if your car is equipped with certain features like an anti-theft device.
No matter how you apply for insurance, you’ll probably get quotes pretty quickly. Some carriers will offer you multiple versions of a quote, usually a basic one with low coverage limits, a standard option with average coverage limits and a third option with very high coverage limits. Keep in mind that working through an independent agency may take longer, but you'll get quotes from multiple companies rather than just one at a time.
Remember that it’s generally a good idea to have high coverage limits for the necessary coverage types, but the higher your limits are the more you’ll pay. Your quote may also include some types of coverage you don’t actually want or need, so look carefully at your options.
And for your deductible, setting it higher leads to lower premiums, because you’re agreeing to pay more out of pocket in the event that you file a claim on your comprehensive or collision insurance.
You may be tempted to choose the car insurance company that offers you the best price, but be sure to do your research on the different carriers. Carrier A may have quoted you slightly higher rates than Carrier B, but if it has significantly higher claims satisfaction ratings, that extra cost could be worth it. And not every car insurance company offers the same coverage options, so if you need something specific, you should consider which company offers that type of coverage.
Reviewing an insurance company’s track record and business reputation is just as important as examining the quotes they’ve offered you. The most cost-effective auto insurance policy means nothing if there’s not adequate customer service to go along with it.
So how do you know you’re choosing the right company? There are a few ways to do your due diligence:
Check out ratings on third-party sites like Trustpilot, Consumer Reports, or the Better Business Bureau
Look up the insurers through the National Association of Insurance Commissioners (NAIC) to see if any complaints have been filed against them, if there are any legal or regulatory problems related to their licensing, or if any financial issues come up
Once you’ve compared your quotes, read up on your potential insurers, and picked a car insurance company that you feel good about, it’s time to put that policy in force and get insured.
Whether you are getting quotes directly from an insurer or through an independent insurance broker, you can sign up for the policy through either option and know that you’ll be getting the same rate. Also a bonus: both brokers and carriers can offer you discounted rates on other insurance policies through the same carrier, like renters or homeowners insurance. If you’ve been working through an insurance broker, they may even be able to sign you up for the policy themselves.
If you’ve been shopping for car insurance to replace a current policy, wait until after your new coverage has started before you cancel your old policy. You want to make sure you don’t leave any gaps in coverage.
To do this, set the cancellation date of your old policy and the effective date of your new policy on the same day. Insurance policies begin and end at 12:01 AM on a given date, so you don’t have to worry about having a full day of overlapping insurance.